Estate planning is the process of structuring personal and corporate affairs so that wealth transfers to the right people, in the right form, with minimal erosion to tax and probate on death.
For incorporated business owners, estate planning is more complex than for most Canadians. The business is often the largest asset, and how its value flows to heirs, through shares, insurance, a buyout, or a sale, determines the after-tax outcome for the family. The CRA treats death as a deemed disposition of all capital property, triggering capital gains tax on the terminal return unless specific planning structures are in place.
The available tools, wills, powers of attorney, spousal rollovers, insurance, family trusts, and estate freezes, need to work together as a coordinated plan rather than as separate documents drafted in isolation. A will that contradicts a shareholders agreement, or insurance proceeds that flow through the estate instead of to the corporation, can create unintended consequences.
See also: Estate Freeze · Family Trust · Shareholders AgreementEstate planning for business owners is not a personal finance exercise. It is a business and tax planning one. See how Wefinx approaches exit planning.